Pamela Devata of Seyfarth Shaw Labor Law Firm discusses Red Flag Rules in our Complimentary Webinar: Identity Theft: A User's Responsibilities under the FACT Act Red Flag Regulations...
Summary of the Law
On November 1st, all companies using consumer reports and financial institutions were required to implement Red Flag Rules pursuant to the Fair and Accurate Transactions Act (FACT Act), which amends the federal Fair Credit Reporting Act. The intent of these new regulations is to identify individuals who may be victims of identity theft. The regulations have requirements for dealing with “Address Discrepancies” on consumer reports and a special set of rules for financial institutions and creditors known as the “Red Flag Rules”.
How does this affect your company and its relationship with Pre-employ.com?
When we request a credit report for you, national consumer reporting agencies, such as TransUnion, Equifax, and Experian, are required to notify requesters where there is an address discrepancy (FACT Act Section 603(p)). For example, if the address in the national CRA’s files is notably different from the address provided, your company must implement standard procedures to verify the correct address. The discrepancy information will be provided to you by Pre-employ.com when received by the national CRA. At that time, should you receive an address discrepancy notice, you should begin the address verification process.
Implementing Proper Procedures
Pre-employ.com recommends that your company implement a thorough step-by-step verification process to initiate once the address discrepancy report is submitted to you.
The regulation gives examples of address confirmation procedures that can be implemented as part of your policy, such as:
• Verify the address with the consumer or applicant
• Verify the address through a third party
• Review your own records and documents on file to confirm the address
Address Confirmation Rule
At the time the accurate address is confirmed, your company must submit the confirmed address to the national CRA (FACT Act Section (d)(1)). There are more demanding Red Flag regulations for financial institutions and creditors; however, all users should seek counsel to ensure proper procedures are implemented for the specific type of company.
To view our archived complimentary webinar with guest speaker Pamela Devata, labor law attorney from Seyfarth Shaw LLC titled: Identity Theft: A User's Responsibilities under the FACT Act Red Flag Regulations please go to http://www.pre-employ.com/FACTA .
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